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Wednesday, September 21, 2016

Keppel Telecommunications & Transportation Ltd (KPTT SP) | Data CentREs ‘R’ US

My view:

S'pore Event Driven | Theme: BUY-nearer-sgd1.60-as-fund-interests-gaining-momentum-on-DC-services-platform

BUY | Keppel T&T (KPTT SP) Px/Tgt S$1.68/2.28


1.        Investors are skeptical that share price has already gone up from S$1.40 to S$1.68 (+20%) since Jul 16 before we initiate coverage. However, we are of the view that there is a further +40% upside because of:

        a.        Interests from Funds are gaining from new catalysts (share price was stuck at S$1.50 over last 18 months from Jun 15; only now pushing up)
        b.        Target S$2.28 is a 10% discount to SOTP
        c.        Value of its listed entities in its Investment arm is 75% of current market cap; pointing to significant undervaluation
        d.        Proxy to Digital Economy & Cloud Computing
        e.        Dividend yield 3.3%

2.        UOBKH Research initiate coverage of KPTT SP with BUY and SOTP-derived target price of S$2.28, offering 2016 dividend yield of 3.3% The value of Keppel T&T's Investment arm alone makes up 75% of its market cap while its Domain Controllers (DCs) are some of the best in the business, offering superior performance with ROIC in the high teens. There is huge growth potential in being a proxy to the growing digital economy and with the Alpha Fund, the rate of current DC development could double.

UOB Kay Hian Research issued a report dated 21/9/16 on Keppel T&T. Please contact us for the full research analyst report.

Thanks & Regards
 
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Wednesday, September 14, 2016

Destini Bhd (DSTN MK) | New MYR1.04 target on back of new massive Rail MRO Contract

My view:

Mal-MRO-pick | UOBKH upgraded target pricen to MYR1.04 on a game changing Rail MRO contract from KTM

BUY | Destini Bhd (DSTN MK) Px/Tgt MYR0.87/1.04                              
 
UOBKH Research upgrades to BUY with a higher target price of RM1.04, based on a higher benchmark 15x 2017F fully-diluted PE target (14x previously) as we are fairly optimistic on Destini clinching the Rail MRO contract, given the Ministry Of Finance's 20% stake in the company. We believe these contracts would be a rerating catalyst and we expect the stock price to react positively ahead of the impending newsflow of these contracts. We continue to like Destini for its: a) significant earnings rerating arising from sizeable RM1.7b impending contract wins within its marine and rail division, and b) the high barriers to entry business.
 
UOB Kay Hian Research issued a report dated 14/9/16 on Destini Bhd. Please contact us for the full research analyst report.

Thanks & Regards

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Tuesday, September 13, 2016

LHN Group (LHN IPO) | +50% upside; another likely +60% return ahead

S'pore-Event-Driven-pick | LHN (LHN SP) Px/Tgt SGD0.20/0.32 (+60% upside)

Theme: +50%-upside-over-last-one-year-&-another-60%-to-go

               
My View:

Finally punching through its sideway trend at 13cts to current 20cts after 1-year. Target 32cts

1.        We have been calling a BUY on LHN SP despite much skepticism as share price languished near 13cts (after falling from 23cts IPO).

2.        Prospects have turned up as follows:

        a.        Business have improved tremendously with its industrial property being 100% filled-up at good rents
        b.        More synergistic business that is profit-accretive
        c.        Valuation expansion ahead
 
Any expression of trading idea found on this website is for sharing only and does not constitute an invitation to trade or investment advice. Please read disclaimer page here.

Friday, September 09, 2016

Destini Bhd (DSTN MK) | Chugging up to my myr1.00 target

My view:

Mal MRO pick | Theme: Share price finally punched through its 60sen base to chug up to my target MYR1.00

BUY:
 
1.        Destini Bhd (DSTN MK) Px/Tgt MYR0.80/1.00 (my target)

2.        We had called a CONVICTION BUY on Destini Bhd as follows:
        a.        May 2014:                60 sen:                Placed 120 million shares @ 60 sen to Funds
        b.        Jul 2014:                70 sen:                Share price peaked at 70 sen
        c.        Aug 2015:                58 sen:                Large Strategic investor took 100 million shares @ 58 sen
        d.        Feb 2016:                63 sen:                UOBKH report target prudent 63 sen (Destini to show strong profits before upgrade)
        e.        Jul 2014-Aug 2016:        60 sen:                Share price sideways 60 sen for 2 years (because investors misperceived that Destini Bhd is a weighed-down Oil-play)
        f.        Sep 16:                80 sen:        Share price now 80 sen
        g.        Sep 16-1Q17:                100 sen:        Share price likely to chug up to my MYR1.00 target as Analysts/Funds re-rate up valuations on better-than-expected-profits
        h.        Oct 16:                100 sen:        Destini is featured as part of UOBKH Asia GEMS Conference in Fullerton Hotel S'pore 11/12 Oct

Thanks & Regards

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Monday, September 05, 2016

Singapore Alpha Picks in Sep | Bumitama (BAL SP) /China Aviation Oil (CAO SP) /Frasers Logistics (FLT SP) /S'pore O&G (SOG SP) /Starhub (STH SP)

My view:

S'pore-Aipha-picks | Theme: S'pore-Alpha-Picks-that-have-immediate-Catalysts-&-Timeline

CONVICTION BUY:


1. Bumitama (BAL SP) Px/Tgt SGD0.72/1.25
2. China Aviation Oil (CAO SP) Px/Tgt SGD1.39/1.90 BUY <SGD1.30

BUY:

1. Frasers Logistics (FLT SP) Px/Tgt SGD0.97/1.08
2. S'pore O&G (SOG SP) Px/Tgt SGD1.09/1.38

SELL:

1. Starhub (STH SP) Px/Tgt SGD3.47/2.62

Bumitama

1. Huey Chuen reckons earnings growth is underpinned by: a) production recovery, ie expect at least 58-60% of 2016 production to come in 2H16, b) higher CPO ASP (expected to be 5-8% higher yoy), and c) lower cost of production as bulk of manuring cost was spent in 1H16.

2. 2017 should see stronger earnings growth on the back of strong production recovery from its young age profile and new mature areas.

Share Price Catalyst

• Stronger earnings growth in 2H16 and 2017 would be the key catalyst to its share price.
• Rising CPO prices to lift sentiment on plantation sector.

China Aviation

1. Edison is upbeat as APAC's largest physical jet fuel trader, CAO holds a monopoly in supplying imported jet fuel to the whole of China, making it a proxy to China's global aviation boom.

2. Together with its stake in the exclusive refueller for SPIA, CAO has two solid growing sources of recurring income.

3. Management also has a five-year plan to double profits to US$120m through organic and M&A growth.

Share Price Catalyst

• A steeper jet fuel future contango market will likely enhance trading profits.
• Any M&A announcements on earnings-accretive fuel assets will also likely result in share price reviews.

UOB Kay Hian Research issued a report dated 5/9/16 on Singapore Alpha Picks. Please contact us for the full research analyst report.

Thanks & Regards

Invest Stock - www.facebook.com/investstock
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Malaysia Alpha Picks in Sep | Scientex (SCI MK) /Genting Bhd (GENT MK) /BIMB (BIMB MK) /Bumi Armada (BAB MK) /Kerjaya Prospek (KPG MK)

My view
Malaysia Alpha Picks in Sep | Theme: Malaysia-Alpha-Picks-that-have-immediate-Catalysts-&-Timeline

CONVICTION BUY:

1. Scientex (SCI MK) Px/Tgt MYR6.15/14.40
2. Genting Bhd (GENT MK) Px/Tgt MYR7.92/9.75

BUY:

1. BIMB (BIMB MK) Px/Tgt MYR4.02/4.40
2. Bumi Armada (BAB MK) Px/Tgt MYR0.76/0.92
3. Kerjaya Prospek (KPG MK) Px/Tgt MYR2.36/2.58
4. Kim Loong (KIML MK) Px/Tgt MYR3.19/4.20
5. MRCB-Quill REIT (MQREIT MK) Px/Tgt MYR1.24/1.35
6. Tenaga (TNB MK) Px/Tgt MYR14.55/16.00

Scientex

1. UOBKH Research remain upbeat on Scientex's ambition to become a regional consumer packaging player, whereby earnings should kick in from 2016 and beyond. Meanwhile, its property segment should stay resilient amid a weak property market due to its focus on affordable housing. It is currently trading at an undemanding 2017 PE of 8.4x.

Share Price Catalyst

• Further expansion in capacity.
• More earnings-accretive M&As.

Genting Bhd

2. UOBKH Research is of the view the combination of GENT's cheap fundamental value and the anticipated gaming-related catalysts in 4Q16 (GENM's opening of Genting Integrated Tourism Plan (GITP) amenities and GENS' EBITDA recovery due to provisions ease and luck normalisation) remain as catalysts to re-rate the stock.

Share Price Catalyst

• Note that GENT's share price has historically been moderately correlated to GENS SP's.
• Likewise, GENT's share price should sympathetically move up as GENM's share price is expected to appreciate during the 4Q16's inaugural phase opening of GITP.
• Any positive development on TauRX's dialogue with regulatory authorities European Medicines Agency (EMA) and US Food and Drug Administration (FDA) would be a catalyst.

UOB Kay Hian Research issued a report dated 5/9/16 on Malaysia Alpha Picks. Please
contact us for the full research analyst report.

Thanks & Regards

Invest Stock -
www.facebook.com/investstock
Any expression of trading idea found on this website is for sharing only and does not constitute an invitation to trade or investment advice. Please read disclaimer page here.